In Department C, materials are added at the beginning of the process. There were 1,000 units in beginning inventory, 10,000 units were started during the month, and 7,000 units were completed and transferred to finished goods inventory. The ending inventory in Department C in June was 40% complete as to conversion costs. Under the average cost method, what are the equivalent units of production for materials and conversion?

Question

Business

Dereon Ibarra

16 February, 09:32

In Department C, materials are added at the beginning of the process. There were 1,000 units in beginning inventory, 10,000 units were started during the month, and 7,000 units were completed and transferred to finished goods inventory. The ending inventory in Department C in June was 40% complete as to conversion costs. Under the average cost method, what are the equivalent units of production for materials and conversion?

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Lilah Summers · Answer 1

equivalent units of production:

materials = 11,000

conversion = 8,600

Explanation:

Step 1 Determine the units of Closing Work In Process Inventory

Units in Closing Work In Process Inventory = Opening Work In Process Inventory + Units Started During the Month - Units completed and transferred to finished goods

= 1,000+10,000-7,000

= 4,000

Step 2 Determine Total Equivalent Units for Materials and Conversion Costs

Materials

Note : materials are added at the beginning of the process

Units completed and transferred to finished goods (100%) = 7,000

Units in Closing Work In Process Inventory (100%) = 4,000

Total = 11,000

Conversion

Units completed and transferred to finished goods (100%) = 7,000

Units in Closing Work In Process Inventory (40%) = 1,600

Total = 8,600